Telecom Minister Kapil Sibal has an ambitious plan to convert post offices in India into banks and offer its services at low rates especially to the rural areas. This comes in the wake of the Post Offices fast becoming extinct even in cities with modern forms of communications overtaking the letters and telegrams as well money orders. The cities are witnessing merger of many Post Offices and recruitment has long back stopped. To raise revenue the Post Offices now accept mobile bills of private operators and undertake bulk mail from private players at rates below couriers. Speed Post diversified into Speed Post money orders where instant money is delivered. Sub post offices are wound up and Postmen now have to cover more areas but with lesser load. Old timers say that they have no clue as to who the Postman is whereas earlier each household knows the Postman a popular figure. He used to turn up on festival days to get his tips. The situation took a turn with mobile phones fanning out and internet connectivity reaching out and the advent of emails putting hand written letters out of fashion. Postal telegrams have shifted to email delivery to regions with connectivity and post offices in turn deliver it instantly. Postal savings offer the most competitive rates and more tax savings but it is not aggressively marketed since the agents are given low percentage.
SBI vs Postal BanksSibal says that even SBI would not able to match the Postal network and now that it has the buildings ready then only the other facilities has to be in place. With not much money spent on infrastructure the bank can offer services at rates much cheaper than nationalized banks.